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Stelrad To Acquire DL Radiators

Stelrad sign Mexborough
  • Stelrad To Acquire DL Radiators, Expanding Product Range And Geographical Presence

Stelrad, a leading specialist manufacturer and distributor of radiators in the UK, Europe and Turkey, today announces it has entered into an agreement with De Longhi Industrial S.A to acquire 100% of the share capital of DL Radiators srl ("DL Radiators") for €28.346 million on a debt free, cash free basis. DL Radiators is a leading Italian heat emitter manufacturer which produces and sells both hydronic and electric radiators into the domestic heating market.

DL Radiators’ main manufacturing site is located in Moimacco, near Udine, Italy and employs approximately 350 people. Its product range includes steel panel, multicolumn steel, aluminium and towel warmer radiators, providing customers with flexible heat emitter solutions suitable for a wide variety of installations. 

Stelrad’s acquisition of DL Radiators extends the range of radiators available to its existing sales and distribution network, expands its routes to market, provides a well established complementary brand and increases its manufacturing capacity. These criteria are aligned with the acquisition policy and strategy stated at the time of the Group’s admission to the London Stock Exchange in 2021. 

DL Radiators generated €86.9 million revenue and €5.0 million normalised EBITDA for its financial year ended December 20211, with gross assets at 31 December 2021 of €62.9 million.

Upon closing, Stelrad will pay a cash consideration of €28.346 million based on a debt free, cash free enterprise value of six times normalised EBITDA. The transaction will be funded from existing facilities including temporary use of a £20 million accordion option. Leverage is expected to return to comfortably below 1.5x EBITDA by the year end. The Group expects the acquisition to be earnings enhancing in the current financial year with double digit EPS enhancement in future years. 

DL Radiators’ experienced management team, led by CEO Stefano Valente, will continue to run the business with oversight from Stelrad, and the transaction is anticipated to close in the coming weeks, following satisfaction of conditions precedent. The Group intends to provide further detail on DL Radiators at the Group’s interim results on 12 August 2022. 

1 Reported EBITDA per the 2021 financial statements was €5.071 million

Trevor Harvey, CEO of Stelrad, said: 

“This is a compelling transaction for Stelrad and allows us to grow our business through the provision of additional products and through geographical expansion. DL Radiators has strong brands with a significant customer base and we look forward to working with the team to realise value opportunities and expand the market for their higher value product ranges. 

“Following completion of this transaction, Stelrad will be a market leader in six countries and hold a top 3 position in five more. We will continue to develop our mainland European relationships with the long-established regional distribution players in those territories, ensuring we continue to adapt to evolving routes to market.” 

Stefano Valente, CEO of DL Radiators, added: 

“We firmly believe that the success of a company is built on the commitment of people who are passionate about their work and who can open up to the world and creatively contribute to its improvement. We see this as a shared value with Stelrad’s experienced team from the management through to sales and operations and we are excited to work alongside them to grow DL Radiators as a leading heat emitter manufacturer. 

“The mission of DL Radiators is the creation of heating products fit for the future, which are able to improve not only the comfort of the rooms but the quality of everyday life, combining intuitive technological capabilities with Italian attention to design. Our partnership with Stelrad allows us to continue to fulfil this mission to provide a best-in-class offering.” 

The acquisition constitutes a class 2 transaction, and this announcement has been made pursuant of Chapter 10 of the UK Financial Conduct Authority’s Listing Rules.

Source : Stelrad

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23 June 2022

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